Jiarui Wang

Economists often view competition as a means to motivate effort, improve efficiency, and therefore enhance welfare. However, this instrumental perspective may overlook that competition itself can directly influence individuals’ welfare. This paper investigates how competition affects utility derived solely from the act of competing, independent of material outcomes. I conduct a series of experiments which show that competition affects utility through two opposing channels: a belief channel, in which competition lowers expectations of success and reduces utility; and a preference channel, through which individuals derive enjoyment directly from competing. The preference channel dominates, resulting in a net positive impact on utility. I further show that these welfare effects influence future choices: competition induces attribution bias, leading individuals to misattribute the enjoyment of competition to the underlying task and increase their willingness to engage in it again, even in the absence of competition. These effects also extend to social interactions, reducing post-competition zero-sum thinking and fostering altruism.

Collectivism profoundly influences economic behavior, institutional development, and social interactions. Yet the role of politics in its emergence has received little attention. This paper identifies a novel determinant of collectivism: exposure to centralized political power. Our identification strategy exploits variation in county distances to the historical capitals of centralized Chinese dynasties, using proximity to the dynasties’ initial territorial centroids as an instrument. Drawing on data from the 2005 China census, we find that individuals residing in counties closer to historical capitals of centralized regimes exhibit a stronger collectivist orientation than their cohort peers in more distant counties within the same province. This finding is robust to alternative measures of collectivism and exposure to centralized regimes, more conservative inference approaches, and the inclusion of additional covariates. We further show that the effect differs across regions and between the periods before and after the PRC's establishment in 1949, but not by demographic characteristics such as gender.